Facebook then warned that Messenger’s business is very young.
That was, hands down, the most prevalent topic of conversation on Facebook’s second-quarter earnings call today, despite efforts from executives to downplay the importance of messaging in the company’s near term business growth.
The focus on Messenger started with a comment from CEO Mark Zuckerberg, who mentioned Messenger’s early advertising tests in his prepared remarks. “I want to see us move a little faster here,” he said. “But I’m confident that we’re going to get this right over the long term.”
When Zuckerberg says that he wants to move fast on something, it usually means Facebook is going to move fast. As a result, a number of analysts on the call clearly got excited about the idea of Facebook rushing to make money off the 1.2 billion users on Messenger. A half dozen analysts then asked Zuckerberg and other Facebook executives on the call about their plans for Messenger, how the early ads were testing, and what the ultimate business opportunity would be.
What became clear by the end of the call, though, is that while Zuckerberg said he wants to move faster, the company still thinks Messenger is far away from contributing meaningful revenue. After realizing that analysts wanted to talk about little else, Facebook executives then tried to downplay Messenger’s impact.
Chief financial officer Dave Wehner, for example, used the Silicon Valley cliché´ “early days” to describe Messenger’s business. Chief operating officer Sheryl Sandberg straight-up contradicted Zuckerberg’s earlier statements. “We’re going to be slow and deliberate,” she said.
By the end of the call, even Zuckerberg appeared concerned about the sudden, heavy interest in Messenger’s advertising efforts.
“So many of the questions here today have been about Messenger, and I want to make sure on these calls that we do an accurate and a full job of conveying what we’re actually thinking about as a business and what we think the outlook is going to be,” Zuckerberg said. “[Video ads are] going to be a much bigger driver of the business over the next two to three years, likely even [more] than the trajectory of what we’re doing on Messenger and WhatsApp.”
You could understand, though, why analysts were intrigued when Zuckerberg initially said he wanted to move quickly. Facebook’s revenue growth is slowing, and has been for four straight quarters. The company is currently testing ads in a bunch of new places to try and find a way to complement News Feed, which is running out places for ads (and helps explain the revenue slowdown).
People think that Facebook’s messaging apps, like Messenger and WhatsApp, with 1.2 billion and 1.3 billion users respectively, could provide that boost.
The key is getting users to interact with businesses, a kind of interaction Facebook hopes will be more effective than email marketing or calling a 1-800 number. If Facebook can help more people message with companies, then advertisers will want to spend money on Messenger ads, or pay for features like bots that help facilitate those exchanges. That’s the hope, at least.
“The biggest strategic thing that we really need to do in messaging right now is make so that people organically interact with businesses and that that is a good interaction both for people and for the businesses,” Zuckerberg said today.
Whether or not that’s going to happen quickly or not apparently depends on who you ask.
Recode – All Go to Source
Author: Kurt Wagner
Powered by WPeMatico